AES (NYSE: AES) and Ormat Technologies (NYSE:ORA) are both mid-cap utilities companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, earnings, institutional ownership, risk, dividends and valuation.
Valuation & Earnings
This table compares AES and Ormat Technologies’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|AES||$13.59 billion||0.56||-$1.13 billion||($1.17)||-9.88|
|Ormat Technologies||$662.59 million||5.35||$93.93 million||$2.33||30.08|
This is a summary of current ratings for AES and Ormat Technologies, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
AES currently has a consensus price target of $12.88, indicating a potential upside of 11.38%. Ormat Technologies has a consensus price target of $70.17, indicating a potential upside of 0.12%. Given AES’s higher possible upside, equities analysts plainly believe AES is more favorable than Ormat Technologies.
AES pays an annual dividend of $0.48 per share and has a dividend yield of 4.2%. Ormat Technologies pays an annual dividend of $0.32 per share and has a dividend yield of 0.5%. AES pays out -41.0% of its earnings in the form of a dividend. Ormat Technologies pays out 13.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Ormat Technologies has raised its dividend for 5 consecutive years. AES is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider & Institutional Ownership
92.9% of AES shares are held by institutional investors. Comparatively, 46.4% of Ormat Technologies shares are held by institutional investors. 1.1% of AES shares are held by insiders. Comparatively, 14.7% of Ormat Technologies shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
This table compares AES and Ormat Technologies’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility and Risk
AES has a beta of 1.21, meaning that its share price is 21% more volatile than the S&P 500. Comparatively, Ormat Technologies has a beta of 1.23, meaning that its share price is 23% more volatile than the S&P 500.
Ormat Technologies beats AES on 11 of the 17 factors compared between the two stocks.
AES Company Profile
The AES Corporation is a holding company. The Company, through its subsidiaries and affiliates, operates a diversified portfolio of electricity generation and distribution businesses. It is organized into six strategic business units (SBUs): the United States; Andes; Brazil; Mexico, Central America and the Caribbean (MCAC); Europe, and Asia. As of December 31, 2016, its United States SBU had 18 generation facilities and two integrated utilities in the United States. As of December 31, 2016, its Andes SBU had generation facilities in three countries. Its Brazil SBU has generation and distribution businesses, Eletropaulo and Tiete. As of December 31, 2016, its MCAC SBU had a portfolio of distribution businesses and generation facilities, including renewable energy, in five countries. As of December 31, 2016, its Europe SBU had generation facilities in five countries. As of December 31, 2016, its Asia SBU had generation facilities in three countries.
Ormat Technologies Company Profile
Ormat Technologies, Inc. is engaged in the geothermal and recovered energy power business. The Company designs, develops, builds, owns and operates geothermal and recovered energy-based power plants. Its equipment manufacturing operations are located in Israel. It conducts its business activities in two business segments: Electricity segment and Product segment. The Electricity segment develops, builds, owns and operates geothermal and recovered energy-based power plants in the United States and geothermal power plants in other countries around the world, and sells the electricity it generates. The Product Segment designs, manufactures and sells equipment for geothermal and recovered energy-based electricity generation and remote power units, and provide services relating to the engineering, procurement, construction, operation and maintenance of geothermal, and recovered energy-based power plants. It manufactures products that produce electricity from recovered energy or waste heat.
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